Competitive Analysis of General Motors - Case Study Example

The tools like PESTLE, porter's five force and SWOT analysis are used in this report in order get a better result. The report is designed in such a way that, first there is an introduction followed by PESTLE analysis, porter's five force analysis and SWOT analysisetc. Automobile industry was always a topic of discussion in the field of business and environment. The development of a country by avoiding the automobile industry is impractical or in other words it is ineffective. The main problem the industry is having is that the influence of micro and macro financial environment in the industry.

The recession or any other downtrend the economies badly affect the automobile industry, especially car industry. At the same time any boom or overall economic development of an economy creates a positive impact in the automobile industry by way of increased sale of motor vehicles. Different financial and economic tools help in studying the automobile industry in a better way. Tools like PESTLE analysis, SWOT analysisetc. are extensively used in the market study of automobile industry. Here, automobile industry in the United State is studied by focusing on the company General Motors.

General Motors held the top position among the car industry of the world for a long period. The great leadership of the company was one of the main success factors. But this was past and now the sales of the company are showing a diminishing trend. By looking at the present position of the company, nobody will believe that this was such a company, which was making a huge profit. Due to different reasons the company is now running into losses. One of the main reasons was the present financial crisis.

The crisis not only affected the business of General Motors, but also it affected the business of other automobile companies in /the United States and other parts of the world. As crisis reduced the purchasing power of the people, it caused a drastic reduction in the sale of automobiles. Majority of People will not go for luxurious items and car is considered as the luxurious item. The reduction in sale of the car caused to have a negative impact on the reputation of the company. The price per share of the company declined and the debt of the company increased.

Now the company is facing it difficult to run the business in a balanced way due to different factors, especially poor management. The poor management led to ineffective use of funds, increasing of debtetc. The company lost its position in markets where the company is considered as holding top position. Another reason for the failure was that the company's attitude. The company focused on marketing and financing activities instead of focusing on customer requirements. The company forgot the basic of the business activity that is consumers are the king in the market (Ramakrishna, 2006)GM which once controlled about half the US market is now struggling to maintain its leadership position.

This is not the case of GM alone. Even Ford Motors (Ford) and Chrysler, the other carmakers from Detroit, have been losing their market shares in recent times. In the late 1990s, the "big three" had a combined market share of more than 70%. Now, their combined market share in the US is 58% and it is declining continuously (Domestic trends, 2008, p. 3).GM